Is Latin America Ripe For A Startup Revolution?
By allying themselves commercially, Mexico, Colombia, Chile and Peru have created a massive consumer base — just what new, home-grown tech firms need to grow and prosper.
MADRID — The leaders of Mexico, Chile, Colombia and Peru weren't the only ones who traveled to Puerto Vallarta, Mexico last month for the latest presidential summit of the Pacific Alliance (AP in Spanish) trade bloc. Some 250 business leaders, members of the AP's Business Council, also made the trip — to share ideas on how to boost trade and investment among the bloc's member countries.
Little wonder, given the opportunities available in a trade alliance that represents more than 220 million people. But what doesn't make sense is how few, if any, of the business leaders in Puerto Vallarta were startup entrepreneurs. That ought to change, because together, the combined customer base in Chile, Colombia, Mexico and Peru has more than enough critical mass to turn startups into more competitive "scaleups."
A large customer base is crucial for any firm that wants to keep growing, generate business and quality jobs in their countries, and compete with European or Asian rivals that already enjoy bigger markets in terms of population and spending power. And with startups, the options are fairly straight forward: grow, die, or sell out to foreign competitors, which means losing decision-making power as a region.
Together, Mexico, Chile, Colombia and Peru can create more Latin American unicorns.
The AP bloc clearly has potential for emerging tech firms, as discussed extensively at last year's South Summit AP in Bogota, Colombia. Further evidence comes from a joint report on Spanish technology startups done by Lufthansa and IE Business School. The report found that the most attractive destinations for Spanish tech firms were Mexico, Colombia, the United States, Chile and Peru. Ahead of countries like the United Kingdom and France.
If Spanish businesses can see this potential, then the AP countries should as well. Their trade alliance is a perfect framework for helping regional tech businesses grow. Together, Mexico, Chile, Colombia and Peru can create more Latin American unicorns to compete globally. Because when it comes to business growth, market size really does matter.